Policy Archives • LETA

What is it?

The $1.9 billion Technology Investment Roadmap is the Australian Government’s plan to develop clean technology in industry, transport and agriculture over the next decade.

Announcing the plan, Energy Minister Angus Taylor forecasts it will avoid 250 million tonnes of emissions each year by 2040.

The roadmap’s focus on low emission technology is further acknowledgement that these technologies, and in particular carbon capture utilisation and storage (CCUS), are needed to play a strong role to meet or beat international climate commitments.

Under the government’s plan, the Australian Renewable Energy Agency (ARENA) and the Clean Energy Finance Corporation (CEFC) would now be allowed to invest in renewables as well as a broader range of technology-neutral projects that produce low emissions.

What’s the problem being solved?

The need to rapidly reduce emissions in a way that supports economic growth – that’s what Australia’s Chief Scientist Dr Alan Finkel AO describes as the biggest global challenge of our time. It’s what the Technology Investment Roadmap addresses.

“It identifies how emerging low emissions technologies can become economically competitive with and replace high emission incumbents, just as electric light bulbs replaced kerosene lamps, and are now being replaced by LEDs.” Dr Finkel.

The roadmap uses technology to tackle the problem of providing affordable, clean, reliable and flexible energy, as well lowering emissions from industry to meet Australia’s international climate commitments.

How does the roadmap address the challenge?

The low emissions technology statement identifies five areas for investment:

  • hydrogen
  • energy storage
  • low-carbon steel
  • carbon capture and storage
  • soil carbon.

They have been identified for their potential to significantly reduce global emissions from energy, transport, industry and agriculture if they are developed and widely used. These sectors account for around 90% of emissions, producing approximately 45 billion tonnes of CO₂ each year.

Each of the five priority areas has specific ‘stretch goals’ to achieve. These goals are to bring low emission technology “to economic parity” with existing mature technologies. They are also designed to give investors confidence in government commitments and priorities.

The goals are:

  • The achievable $2 per kilogram price for the production of hydrogen. For comparison, the International Energy Agency estimated the average production cost of hydrogen at about $8 per kilogram.
  • Energy storage — electricity from storage for firming under $100 per MWh. Firmed wind or solar power is capable of delivering power on demand. This would enable firmed wind and solar at pricing at or below today’s average wholesale electricity price.
  • Low carbon materials — low emissions steel under $900 per tonne and low emissions aluminium under $2,700 per tonne.
  • Carbon Capture and Storage — CO₂ compression, hub transport, and storage under $20 per tonne of CO₂.
  • Soil carbon measurement under $3 per hectare per year.

Some experts argue that Australia still has work to do to catch-up to other countries such as China, Japan and Germany – as well as the European Union – with investment levels in low emission technology.

What does LETA think?

The roadmap’s focus on low emission technologies, and particularly CCUS, is critical to helping meet international climate commitments and providing certainty for industry.

That’s because the proven technology of CCUS can be used in the energy sector as well as to remove emissions produced by industries such as steel and cement.

Low Emission Technology Australia (LETA) Chief Executive Officer Mark McCallum said internationally recognised evidence by specialist climate change bodies agree that “international climate change targets cannot be achieved without CCS”.

Since 2006, LETA has invested more than AU$310 million in over 15 projects developing low emissions technologies in Australia. These include proving carbon capture for coal-fired power stations, geological studies for carbon storage locations across Australia, and ventilation air methane abatement studies. The government’s new initiatives provide the framework to build on this groundwork and encourage industry and government investment to further develop low emissions technologies and at scale.

What does the roadmap say about renewable energy?

The roadmap’s approach is deliberately focused on technology that has the potential to transform economic activity and reduce carbon emissions across multiple sectors. That’s why the report identifies four technology categories:

  • priority low emissions technologies
  • emerging and enabling technologies
  • watching brief technologies
  • mature technologies.

The approach considers mature technologies to include coal, gas, and renewables such as hydro, solar, and wind as they are already commercialised.

Indeed, the roadmap uses the global success of Australian research and development in photovoltaic solar (solar PV) as an example to be followed. After hydro and wind, solar PV is the third-largest renewable electricity technology in the world. And according to the report, almost 80 per cent of global solar PV manufacturing uses technology developed by the University of NSW.

Is low emission technology a permanent or stop-gap solution?

Let’s take hydrogen as an example.

The year 2040. That’s the date the roadmap suggests manufacturing with hydrogen produced by renewables will be commercially competitive.

Hydrogen can be used to generate electricity and power industry, as well as for domestic and transport use. Currently, creating hydrogen is carbon emissions intensive, as it uses fossil fuels. Until making hydrogen with renewables becomes cost-effective, it is the low emission technology of CCUS that can produce clean hydrogen – and significantly reduce carbon emissions.

In fact, the roadmap explains that fossil fuel-derived hydrogen combined with carbon capture “might be the lowest cost clean production method in the short-term”.

Into the future, low emission technology will continue to play a crucial role in meeting global demand for decarbonised energy and net-zero emission industry to provide sustained economic growth.

Where do industry emissions fit in?

A significant part of Australian and global emissions come from industries that use fossil fuels to manufacture products we rely on, such as steel, cement, chemicals and fertiliser – often called ‘hard-to-abate’ sectors.

The roadmap points out that two-thirds of Australia’s emissions are produced “outside the electricity grid”. The International Energy Agency reports almost 20% of global emissions come from heavy industry. That means reducing emissions needs to deal with the emissions produced by industry.

Low-emissions steel and aluminium have been identified as suitable for industry investment partnerships. The Roadmap also establishes a specific fund to encourage industry to invest in and adopt low emissions technology.

Where to now?

The federal government is planning to spend over $18 billion on low emissions technologies in the 10 years to 2030. Since 2014-15, it has spent more than $10 billion on research development, demonstration and commercialisation of low emission technologies including:

  • solar (over $3 billion)
  • energy efficiency (almost $3 billion)
  • wind (over $1 billion).

Over that time the federal government has invested $440 million for low emission fossil fuel technologies.

The Australian Government is currently pursuing legislative changes to allow ARENA and CEFC to  invest in a broader range of low emission technology as well as establishing a process for industry to apply for funding.

Every year the Energy Minister will deliver a ‘Low Emissions Technology Statement’ to parliament and report on progress towards achieving the ‘stretch goals’ for each of the five priority areas.

Across the world there has been a shift towards proven low emissions technology – not just in capturing carbon, but in storing and using it. Australia now has the opportunity to cement its place as a global leader on low emission technology, removing today’s industrial emissions and creating the opportunity to grow new, clean industries like hydrogen.

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